Loan Difficulty in Today’s Real Estate Market

_{Costa Mesa Real Estate Loans Are Tricky}

Think it’s an easy task to get a loan for your Costa Mesa real estate property? Think again. Back in the real estate boom years, it seems an applicant only needed a pulse to get a loan for a property. Unfortunately, that pendulum has swung back in the other direction, and perhaps some say it has gone way to far.

I completed a recent transaction on 2229 Rutgers Drive in Costa Mesa that speaks to how many of the transactions are going with loans involved. This was an REO property, and many times buyers are strong-armed, err, encouraged to use the banks own lender for the new mortgage. In this case, it was a GMAC owned property and it was suggested that GMAC do the financing. Big mistake. It’s not hard to have Loan Difficulty in Today’s Real Estate Market.

It used to be that mortgage brokers had the upper hand on pricing and incentives for buyers. Now, big banks are the ones that don’t have to disclose all of the back-end fees and commissions that they receive from their lending. The problem that my buyers faced were ridiculous- GMAC asked for the same document three times. Then they asked for an updated version of a bank account three times, then they asked for proof of employment three times, it went on and on and on like this for almost 30 days. We would up closing this transaction in just over 60 days, approximately 30 longer than we were scheduled to close.

You think it was my clients qualification? That’s the right thinking, because the big banks have tightened up the lending standards so dramatically from the way it was before it’s funny. But my clients’ qualifications were stellar- both had excellent incomes, both had FICO scores in the 800’s, and both had NO debt. Even the mortgage processor said he rarely sees people on paper with such high qualifications for a loan.

What’s my advice? If you are thinking of buying a home or investment property in Costa Mesa real estate, do your homework. The first step is to talk to a mortgage broker and make sure your financial house is in order.

Colin Delaney is happy to give you mortgage broker referrals and can be reached at (714) 743-9882 or email me.